GBP/USD 5M

The GBP/USD currency pair was also trading higher on Wednesday. The movement during the day can be divided into two periods. The growth of the British currency was observed for most of the day, and the fall began only in the late afternoon. Both movements were practically recoilless. There were no important events and publications in the UK today. Traders ignored US macroeconomic reports. And it should be recognized that it was as neutral as possible. The GDP report recorded a final growth in the fourth quarter of 6.9% QoQ, which is only 0.1% less than predicted. The value of the ADP report exactly coincided with the forecast. Thus, the British pound also continued its "geopolitical growth", which ended towards the end of the day.

As for trading signals, the first of them was formed at night. The price very accurately rebounded from the level of 1.3087 and at the time of the opening of the European trading session managed to move away from the point of signal formation by only 5 points. Therefore, it was possible to open long positions at the very beginning of the European session. Subsequently, the price rose to the Kijun-sen and Senkou Span B lines and bounced off them. At this point, it was necessary to close long positions and open short ones. However, this signal turned out to be false and a loss was received on it. The next buy signal was formed when the price overcame the Kijun-sen area with great difficulty - 1.3158, but this signal also turned out to be false, and the pair could not go up 20 points. As a result, two transactions turned out to be unprofitable and ate up all the profits on the first long position. The last trading signal for short positions should not have been worked out, since it was formed too late. Not the best trading day...

COT report:

The latest Commitment of Traders (COT) report on the British pound showed a new strengthening of the bearish mood among professional traders. However, in general, the mood of the major players has changed too often in recent months, which is clearly seen by the two indicators in the chart above: they are constantly changing the direction of their movement. At the moment, the number of open long positions is less than the number of short positions by almost 37,000. Although three weeks ago their number was almost the same. Thus, the non-commercial group has dramatically changed its mindset, but at the same time it is still not possible to draw any medium-term conclusions now. Firstly, as already mentioned, the mood of major players changes too often, so it is impossible to identify any trend. Secondly, at this time, not only the demand for the pound, which is displayed in the COT reports, matters, but also the demand for the dollar. Thirdly, the geopolitical factor can have an unexpected and sudden impact on the movement of the pound/dollar pair. Therefore, at this time, we can assume a new medium-term fall of the British pound without COT reports. The pound may even rise by 200-300 points at first as part of the next round of correction, and only after that it will rush down again. Non-commercial traders reduced their net position by 8,000 contracts during the reporting week.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. March 31. The European currency is experiencing a strong surge of optimism.

Overview of the GBP/USD pair. March 31. Boris Johnson said that sanctions against Russia should be maintained, and he himself does not see the withdrawal of troops from Kiev.

Forecast and trading signals for EUR/USD on March 31. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

It is clearly visible on the hourly timeframe that the pair spent the last two days on a roller coaster. There was an upward slope of movement, but still the pair changed the direction of movement too sharply and often, and the corrections were deep. And the pound has grown over these two days by only 100-120 points, which is not so much. And yesterday the pair finished below the lines of the Ichimoku indicator, which indicates a possible continuation of the fall today. As of March 31, we highlight the following important levels: 1.3000, 1.3060, 1.3158, 1.3222, 1.3273. The Senkou Span B (1.3148) and Kijun-sen (1.3137) lines can also be signal sources. Signals can be "bounces" and "breakthroughs" of these levels and lines. It is recommended to set the Stop Loss level to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are support and resistance levels on the chart that can be used to take profits on transactions. The UK is set to publish a report on GDP for the fourth quarter, and in the US – two not the most important reports that will be ignored with a high degree of probability. Thus, we believe that the geopolitical factor will remain in the first place for traders. If, of course, there is any news at all on the topic of the military conflict in Eastern Europe.

Explanations for the chart:

Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.

Support and resistance areas are areas from which the price has repeatedly rebounded off.

Yellow lines are trend lines, trend channels and any other technical patterns.

Indicator 1 on the COT charts is the size of the net position of each category of traders.

Indicator 2 on the COT charts is the size of the net position for the non-commercial group.